Analysts Shocked By Steep Rise In Australian Unemployment Rate!

Last month, economists and analysts were shocked to find the Australian unemployment rate had jumped to 6.3 per cent. The figure, which saw official numbers of unemployed jump to above 800,000, was unexpected as the Bureau of Statistics indicated some 38,500 new jobs had been created. So how can we account for the meteoric jump in the statistics?

According to the government, the figure is in part due to the boom in participation rates. Essentially, the government was not expecting a 0.3 per cent jump in the participation figures, which meant that more job seekers had entered the marketplace. As such, they claim the general unemployment figure was impacted by the entry of these people into the job-seeking foray.

As more people were looking for work, the numbers of newly created jobs did little to satiate the demand for gainful employment. Instead of a modest decrease in the unemployment rate, the government has been struck with a larger figure that is economically and politically difficult to explain. Here’s why.

With several large-scale changes to the pension, welfare and employment laws, some analysts suggest a larger number of Australians are feeling the need to return to the workforce. While this may seem like a positive trend, the presence of thousands more jobseekers will likely place increased pressure on an already over-stretched job market. Similarly, an increasingly tough housing market and flagging Aussie dollar have contributed to an overall desire for more substantial full-time employment.

Speaking to the ABC, TD Securities economist Annette Beacher said the announcement was both positive and negative. “What should have been perceived as strong employment report (and Australian dollar positive) was muddied by an unfortunate statistic – there are now 800,700 unemployed in Australia,” she wrote. “This is the highest level of unemployed since November 1994.”

Interestingly, the data also revealed a wider trend in the ways in which people are employed. 12,400 new full-time jobs were added, and 26,100 part-time positions were also opened up. But total working hours fell by 0.2 per cent within a single month.

For observers and pundits, it seems the Australian economy is an increasingly mercurial creature.

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